A client query (client is a PSC operating in IT):
I’m interested in moving the company to the flat rate VAT scheme. What are you thoughts on this?
and our reply:
Its likely to be beneficial to you.
If you have a look at the vat summaries section of your spreadsheet you should be able to see your current effective vat percentages (% of vat paid compared to sales), compare this to the relevant flat rate, the latter normally being lower.
NB When working with the Flat Rate Scheme bear in mind Flat Rate percentages apply to gross turnover, whereas the normal 17.5% VAT rate applies to net turnover. EG a flat rate of 11% compares to normal vat rate of 14.89% (17.5 / 117.5).